7 Benefits of Nearshoring versus Outsourcing

7 Benefits of Nearshoring versus Outsourcing

Building your tech requires the know how and technical chops to build successful tools people want to use. At a certain point in many companies the price of hiring, managing, or sourcing developers becomes very expensive and outside help is brought in. At Llama Tech we focus on bringing the Pros of Nearshoring to our customers, because nowadays with a Global connection. Outsourcing is becoming less and less appealing.

  1. Cost Savings
    Compared to those in North America, the prices to hire tech talent in South America and Latin America is significantly lower. Typically, in relation to US salaries, offshore employees provide the best hourly rates, making offshoring IT talent more cost-efficient than hiring in house. According to the 2018 Guide to Global Software Outsourcing Rates by Accelerance, nearshoring and offshoring, in general, save US firms 40 percent in costs.

    Hiring a seasoned developer in the United States comes with an abundance of costs. Scarcity adds a few layers of cost onto an employer such as, hiring costs, relocation, matching or outbidding offers, and general cost of living costs for the United States. A Mid-Level developer can run anywhere from $75-$150 an hour, while a comparative developer South American can run $25-$50 an hour.

  2. Similar Time Zones lead to Effective Work and Communication
    Hiring development teams in Belarus, India, China creates an imbalanced work life for both the client and the development team. Its hard to be 12 hours apart and get shit done, the waiting and communication hurdles for each party makes it difficult to act on ideas. At Llama Tech our South America HQ is in Quito, Ecuador. Quito shares the same time zone as all of our base of operations such such as Orlando, FL and New York, NY. When we go to work our development team is getting started too. Team meetings all occur around 30 minutes after arriving to the office. Working with our SA HQ is like having an office on another floor in the same building. We rarely bump into each other, but we’re always on the same time and can communicate via tools like slack instantly.
  3. Outsourcing is Expensive
    The phrase goes “time is money” and this phrase proves incredibly true when you outsource. There’s a myriad of reasons why outsourcing is expensive, the two most common reasons are. Setting up a successful and profitable outsourced team is expensive. In this case getting top notch expertise and structured effective partners is expensive. The second reason is when you outsource you have a huge learning curve that can span a few months. A few months of dedicating time to managing a team that is in another country a few thousand miles away takes away time from doing productive business activities such as sales and strategy.  You can either start with an expensive retainer or you can try to do it yourself for cheap and spend countless hours trying to figure everything out.
  4. Nearshore teams are culturally similar
    Its not secret that when you outsource to India, China, or Russia that you’re going to be hit by a culture shock. Everyone involved in Outsourcing has gone through the dilemma. Culture is something you have to learn to adapt to. With Nearshoring you’re passing that pain point by getting a culture that’s  more similar to yours. Developers in Ecuador for example have been trained or worked with North American clients, the schools here have also instilled cultural values more similar to ours. There will always be small nuances here are there, but culture & work wise, an Ecuadorian Developer will seem no different than a developer in Florida.
  5. Hire your own Team
    When you hire your own developers, staying in the same time zone, similar culture, and similar costs to outsourcing, Its a no brainier to hire your own team. With our own team you can build your products faster and alleviate workload for your team.
  6. English Proficiency
    A number of South American and Latin American countries have surpassed China in English proficiency, as reported by the EF EnglishProficiency Index 2015. Countries including Peru, Chile, Ecuador, Mexico, and Brazil are all more proficient in English, making Latin and South America more suitable locations to hire offshore developers for US companies.

    According to EF, Latin America has been on that positive trajectory since 2007.

    “In recent years, policymakers and economists in Latin America have made education reform a top priority for advancing economic development. In 2014, several countries launched national initiatives for improving English language teaching in public schools,” EF reported.

    Now, roughly 800,000 people in South America speak English natively, according to Babbel Magazine.

  7. Quality Control
    Quality software requires a good list of procedures and set practice. When you outsource, you take a gamble on whether your product is going to be built by a competent developer or rushed out by an outsourcing agency with multiple clients. When it comes to outsourcing, you will have to pay for Quality Control. However, if you nearshore and hire your own team you can manage your own team and set in process your Quality Control. No more relying on teams with 12 hour differences or extreme cultural differences where Quality Control can be an issue.

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